Coventry Mall sold at auction for $49.5M, will remain open

A small crowd of onlookers listens as Coventry Mall manager William Ritterling reads the terms and conditions of the Coventry Mall auction on Thursday, Sept. 19, 2013, outside the mall. (Photo by John Strickler/The Mercury)

NORTH COVENTRY — The Coventry Mall was sold at auction Thursday for $49.5 million to U.S. Bank National Association as trustee, pending judicial approval of the proceeding.

An attorney for the bank was the lone bidder for the property at the auction.

The mall has remained open throughout the process and will continue normal operations, according to William Ritterling, general manager of Coventry Mall.

The auction, which lasted less than 15 minutes, attracted about 10 onlookers and was conducted outside the mall in front of the empty Sears store.

After reading the terms and conditions of the auction, Ritterling then opened the floor to bids. He accepted the $49.5 million bid from plaintiff’s attorney Richard A. O’Halloran of Dinsmore & Shohl of Wayne, and since there were no additional bids, closed the proceedings.

Ritterling said that Jones Lang LaSalle remains the receiver and manager of the mall. In a prepared statement, Ritterling said day-to-day operations will not be affected, “and there are no anticipated changes to the property at this time. The local community can rest assured Coventry Mall will continue to be open for business as usual.”

The next step, according to O’Halloran, is for a motion to be filed in U.S. District Court for the Eastern District of Pennsylvania seeking approval of the sale. O’Halloran expects that motion to be filed this week. Once the sale is approved, Jones Lang LaSalle Americas Inc., as the receiver, will sign over the deed for the property to the successful bidder.

Among those watching the proceedings was Bill Douglass, owner of the T-Mobile kiosk inside the mall.

“I’m here because I’m interested to see what happens. As long as someone put some money into it,” he said. “They need to do something about the Sears — that’s holding them back.”

North Coventry Township Manager Kevin Hennessey said Thursday he was not surprised by the results.

“It is what we anticipated was going to happen and we look forward to working with the mall and management to try to rejuvenate the mall and get it to be fuller and more active,” he said

Township Solicitor Lawrence Sager attended the auction on behalf of North Coventry.

According to O’Halloran, it is fairly typical for large commercial auctions like this to have a single bidder. He added that the bank will add the property to its real estate-owned division, where it will continue to be managed. Rittinger stressed that Jones Lang LaSalle is continuing in its role as manager/receiver.

The mall was scheduled for auction in August after the owner of the mall, Coventry Retail LP, failed to make monthly payments on the property. Jones Lang LaSalle was named by the court in March as the receiver, and a default judgment July 24 made it possible for the auction to proceed.

As of the end of June, the bank was owed $62,406,171.09, although interest and costs were expected to continue to accrue.

The auction process is a step that allows the mortgage holder to get back some of its money. Typically, because the filing was made in federal court, U.S. Marshals would handle the auction, but since a receiver was appointed by the court, the receiver was allowed to hold the auction.

For some merchants and mall employees, seeing the notice when they came to work Aug. 19 was the first notification they had about the pending action.

The mall is located at 351 W. Schuylkill Road and Route 100, and includes a total of 12 tax map parcels. Built in 1967, the 802,275-square-foot mall is currently anchored by Boscov’s, Kohl’s, Dick’s Sporting Goods and Ross Dress for Less.

Sears, which had been an anchor store, closed in April 2012 and has been vacant since.

According to its website, Jones Lang LaSalle Americas Inc. is a financial and professional services firm specializing in commercial real estate services and investment management. The company employs more than 40,000 people in 1,000 locations in 70 countries. The company was appointed by the court in March to serve as receiver and manage the property.

Follow business editor Donna Rovins on Twitter @MercBiz

(PREVIOUS VERSION OF THE STORY)

By Donna Rovins

drovins@pottsmerc.com

NORTH COVENTRY — The Coventry Mall was sold Thursday at auction for $49.5 million to U.S. Bank National Association, as Trustee, pending judicial approval of the proceeding.

An attorney for the bank was the lone bidder in the auction of the property.

The mall has remained open throughout the process and will continue normal operations, according to William Ritterling, general manager of Coventry Mall.

The auction, which lasted less than 15 minutes, attracted about 10 onlookers and was conducted outside the mall in front of the empty Sears store.

Ritterling represented the court appointed receiver in the foreclosure proceeding — Jones Lang LaSalle Americas Inc. Ritterling read the terms and conditions of the auction, and then opened the floor to bids. He accepted the $49.5 million bid from attorney Richard A. O’Halloran of Dinsmore & Shohl, and since there were no additional bids, closed the proceedings.

Ritterling said that Jones Lang LaSalle remains the receiver and manager of the mall. In a prepared statement, Ritterling said day to day operations will not be affected, “and there are no anticipated changes to the property at this time. The local community can rest assured Coventry Mall will continue to be open for business as usual.”

The mall was scheduled for auction in August after the owner of the mall, Coventry Retail LP failed to make monthly payments on the property. Jones Lang LaSalle was named in March as the receiver, and a default judgement July 24 made it possible for the auction to proceed. As of the end of June, the bank was owed approximately $62.4 million.

Among those watching the proceedings was Bill Douglass, owner of the T-Mobile kiosk inside the mall.

“I’m here because I’m interested to see what happens. As long as someone put some money into it,” he said. “They need to do something about the Sears — that’s holding them back.”

The next step, according to O’Halloran, is for a motion to be filed in U.S. District Court for the Eastern District of Pennsylvania, seeking approval of the sale. O’Halloran expects that motion to be filed this week.

About the Author

Donna Rovins is business editor of The Mercury, developing, writing, planning and executing the daily local Business section. Reach the author at drovins@pottsmerc.com
or follow Donna on Twitter: @mercbiz.